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Today’s Prices

Grain prices finished higher today as a threatening South American forecast for next week seems to outweigh the possibility of rain in the second week of the forecast.

Weekly Price Summary

Grain Market News

Forecast Precipitation from European Model

This shows the European model precipitation forecast for the 11-15 day timeframe. Yellow is 1” precip, tan is 1.5” and the orange is 2”. Most of Argentina’s growing area is expecting 1-2” of rain in this timeframe. Maybe a little bit less in the far southwest and maybe a little over 2” in the far east and far northwest. These heavier rains and even soaking rains could produce 1-2” of rain southern Brazil. We realize this is days 11-15 in the forecast and certainly the forecast could change a number of times between now and then, but the market is certainly monitoring this potential for much better rain as we get into the middle portion of January.

U.S. Drought Monitor

Here in the U.S. weather is not a major factor with the exception of its impact on hard red winter wheat. The most recent drought monitor shows expanding drought in the southern and western Plains. Drought has been removed in areas of western IA, western MN and into the eastern Dakota’s and eastern NE. That doesn’t mean there are surplus moisture but the severe drought conditions in many cases has been removed.

U.S. Drougth Monitor Class Change

This map is the drought monitor change in class. Anything in yellow, tan, or brown is where drought is building. Anything in green or blue are areas were drought are improving. We can see that from the southern Plains through portions of the southern Delta drought conditions are expanding while in the northern Plains drought is still improving and drought is also improving in much of the PNW. This pattern or trend that we’ve seen the last week is very similar to the pattern that’s been going on the last 3 months.

U.S. Drought Change – Week 13

A drought monitor change for the last 3 months shows tremendous improve in the drought conditions in the northwestern belt and northern Plains. Tremendous improvement in the PNW. There are even improvements in the drought conditions in the central U.S. corn and bean belt. Conditions are quite different as you get into southern, western, central Plains, and even the southern Delta where drought continues to build. The building drought in the southern and southwestern Plains is certainly important for the HRW but it is too early to come to any conclusions regarding the weather for the primary U.S. corn and bean belt.

Grain Market News

U.S. Yield and Production

U.S. and World Ending Stocks

South American 2022 Production

March Corn Chart

Corn prices started out the day lower but rebounded to close higher. It was an outside day trading above yesterday’s high. This keeps the overall long term uptrend still intact with the next objective if we would get friendly news early next week in the South American forecast at $6.17, that’s about a dime above where we closed today. If South American weather would come in friendly that would be an easy target and then the market would start focusing on $6.30-$6.40 as the next potential target. Again, that would require bullish weather news out of South America.

January Soybean Chart

Soybeans made a new high for the move going to $14.05, the first time we’ve gone above $14 going back to July last summer. The push to new highs keeps the uptrend intact. Technical indicators are overbought but there is no sign of topping at least not yet. If we get friendly news next week from the South American forecast, $14.20 would be the next objective and then the market will be looking at the highs posted last spring in the $14.50-$14.75 area. The charts look good but its all about South American weather for price direction early next week.

March KC Wheat Chart

Wheat prices were lower this morning making a new low for the move down to $7.54. We believe wheat prices are undervalued fundamentally and today’s prices did reverse and closed higher. The chart is still pointed downward. One day doesn’t make a trend but today’s reversal and close higher was enough to begin hooking the technical indicators from extremely oversold levels. We do not want to be a seller of wheat, in fact, for those who are wheat buyers this is a good place to be extending some of your ownership.

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